Multiple Choice
Identify the choice that best completes the
statement or answers the question.
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1.
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How would you best define the study of economics?
a. | the study of money | c. | the study of the choices we make | b. | the study of supply
and demand | d. | the study
of yourself |
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2.
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Scarcity, in one word, means _____.
a. | limited | c. | expensive | b. | shortage | d. | free |
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3.
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_____ is an example of land, _____ is an example of labor, and _____ is an
example of capital.
a. | Fish, hammer, cooking | c. | Cooking, fish, hammer | b. | Fish, cooking,
hammer | d. | Hammer, fish,
cooking |
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4.
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Expanding human capital involves you doing things like
a. | lifting weights | c. | building something | b. | counting money | d. | going to school |
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5.
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Production possibilities graphs (PPFs) are useful in showing you how _____ you
are producing
a. | many | c. | neither | b. | efficiently | d. | both many &
efficiently |
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6.
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Like it or not, a cell phone would be considered more of a _____ than
food.
a. | need | c. | service | b. | good | d. | want |
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7.
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An economic system is a group of people answering all of the following questions
except which?
a. | Who gets what is produced? | c. | Who gets the first
choice? | b. | How is it made? | d. | What will be produced? |
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8.
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_____ economies are controlled by the government, while _____ economies are
controlled by the people.
a. | Centrally planned; command | c. | Market; command | b. | Command;
market | d. | Market;
capitalist |
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9.
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Which of the following is the biggest reason all command economies will
inevitably fail?
a. | lack of natural resources | c. | no incentive to work
hard | b. | corruption of government | d. | uneducated workforce |
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10.
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Efficiency and specialization are both good because they allow you to
_____.
a. | produce more with less resources. | c. | live longer. | b. | increase your cash
flow. | d. | invest more time in
education. |
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11.
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The principle that states the consumers, not the government or businesses,
ultimately control the economy is known as _____.
a. | laissez faire | c. | government dergulation | b. | Monroe
Doctrine | d. | consumer
sovereignty |
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12.
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An entrepreneur is simply someone who _____.
a. | makes a lot of money | c. | runs their own business | b. | creates something
new | d. | invests in the stock
market |
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13.
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Who is primarily responsible for running our economy?
a. | consumers & businesses | c. | Congress | b. | the
government | d. | only the large
corporations |
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14.
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Which of the following is NOT one of the government’s jobs in our
economy?
a. | catch us when we “fall” | c. | make sure everyone is
equal | b. | provide a foundation for us | d. | keep us safe & knowledgeable |
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15.
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Which of the following would be an example of a positive externality?
a. | the stock market goes up | c. | you decide to buy a new
car | b. | your brother shares a pizza with you | d. | our government decides to raise income
taxes |
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16.
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OSHA is responsible for regulating _____, and the EPA is responsible for the
_____.
a. | workplace regulations; food | c. | food;
environment | b. | food; workplace regulations | d. | workplace regulations; environment |
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17.
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Safety net programs include all of the following EXCEPT?
a. | cash transfers | c. | unemployment | b. | free riders | d. | in-kind
benefits |
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18.
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The law of demand tells us that consumers _____.
a. | control the economy | c. | buy more when the price is low | b. | spend too much
money | d. | have to buy certain
things |
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19.
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Which of the following would most likely be considered an inferior good?
a. | plasma tv | c. | gold jewelry | b. | new Corvette | d. | Walmart
clothing |
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20.
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Elasticity measures _____.
a. | how much quantities changes when the price changes | c. | how much our economy changes from
year to year | b. | the amount of money we have to spend in the economy | d. | the amount of room there is for the economy to
improve |
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21.
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The law of supply says that as the _____.
a. | prices go down you shut down | c. | incomes go up people buy
more | b. | economy improves you start working again | d. | price goes up you produce
more |
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22.
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A ____ would likely be a variable cost, while _____ would count as being
fixed.
a. | hammer; tool box | c. | sugar; cordless drill | b. | computer;
banana | d. | cantalope; french
fries |
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23.
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Excise taxes always _____.
a. | shift the supply curve left | c. | increase how many we want to
buy | b. | make us buy imported goods | d. | help the countries overseas |
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24.
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The “intersection of happiness” can be found where?
a. | Walmart | c. | in China | b. | Route 15 & Interstate
80 | d. | point of
equlibrium |
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25.
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_____ are most likely to be unhappy when the price is too low and happiness can
be restored by raising the price.
a. | Producers | c. | Governments | b. | Consumers | d. | Rich people |
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26.
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Price ceilings are used to keep prices _____.
a. | constant | c. | high | b. | low | d. | from decreasing a
lot |
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27.
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Having a lot of market power will most likely benefit who?
a. | the government | c. | a producer | b. | consumers | d. | tax payers |
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28.
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Which type of market structure enjoys the most market power?
a. | Walmart | c. | China | b. | Egypt | d. | monopolies |
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29.
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An oligopoly is _____.
a. | a big company based overseas | c. | an increase in government
spending | b. | a market with only a few sellers | d. | the only way to end the
recession |
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30.
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Which of the following is an example of price discrimination?
a. | flying on an airplane | c. | being charged too much | b. | buying Spaghetti
Os | d. | having an employee
discount |
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31.
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_____ is the most heavily regulated business, while _____ are the easiest to
start.
a. | Partnership; corporations | c. | Corporations;
partnerships | b. | Sole proprietorships; partnerships | d. | Corporations; sole
proprietorships |
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32.
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How many shares of stock do you need to own to be considered “part
owner”?
a. | all of them | c. | 50% or more | b. | at least 5% | d. | only 1 |
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33.
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A bear market occurs when _____.
a. | stocks consistently go down | c. | everybody is angry at the
government | b. | the economy is getting eaten alive | d. | no one buys anything but the bare
necessities |
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34.
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Fringe benefits include all of the following EXCEPT?
a. | vacation time | c. | company car | b. | income taxes | d. | free food |
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35.
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Fiat money has value _____ while commodity money has value _____.
a. | because the gov’t said so; because the object itself is valuable | c. | because it is rare;
because the government said so | b. | because it’s worth more; because you can
save it for later | d. | for a
short time; for a long time |
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36.
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Simply put, banks “create” money today by _____.
a. | printing more of it | c. | loaning money to others | b. | taking it out of the
vault | d. | using it
electronically |
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37.
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Most people try to maximize _____ while minimizing _____.
a. | costs; profit | c. | return; risk | b. | profit; liquidity | d. | liquidity;
profit |
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38.
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The safest investment today is _____ because it is backed by the FDIC.
a. | a savings bond | c. | a stock | b. | a bank account | d. | a mutual fund |
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39.
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_____ tend to have high returns, while _____ tend to have high liquidity.
a. | Savings bonds; stocks | c. | Bank accounts; savings bonds | b. | Stocks; mutual
funds | d. | Stocks; bank
accounts |
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40.
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Gross domestic product (GDP) measures the _____.
a. | total value produced | c. | spending power of consumers | b. | amount of profit
earned | d. | amount of national
debt |
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41.
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_____ GDP is based on price NOW, while _____ GDP focuses on quantity.
a. | Physical; fake | c. | Expenditure; income | b. | Real; nominal | d. | Nominal; real |
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42.
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Which part of the business cycle do most people like the least?
a. | expansion | c. | contraction | b. | peak | d. | trough |
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43.
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Capital deepening occurs whenever _____.
a. | people drop out of school to work | c. | banks close
down | b. | people build additional homes | d. | people stay in school
longer |
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44.
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If you could choose, you would want your income to be ______ the poverty
threshold.
a. | far above | c. | below | b. | at | d. | very close to |
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45.
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The countries with the highest amount of their GDP in agriculture tend to be
_____.
a. | wealthy | c. | in the middle | b. | poor | d. | one without much
unemployment |
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46.
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Fiscal policy can be used right now to help the economy by _____.
a. | increasing the money supply | c. | decreasing
taxes | b. | decreasing spending | d. | decreasing the money supply |
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47.
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Monetary policy can be used right now to help the economy by _____.
a. | decreasing the money supply | c. | decreasing
taxes | b. | increases taxes | d. | increasing the money supply |
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48.
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Who is the most powerful person in the US, with regards to the economy?
a. | ex-President Bush | c. | Ben Bernanke (head of FED Reserve) | b. | President
Obama | d. | Adam
Smith |
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49.
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The US has, in recent years, continously experiences a _____, which continues to
make our _____ grow.
a. | budget surplus; GDP | c. | budget deficit; GDP | b. | budget deficit; national
debt | d. | budget surplus;
national debt |
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50.
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Mandatory spending would include _____, while ______ would be
discretionary.
a. | the military; national parks | c. | Social Security; the
military | b. | national parks; military | d. | Social Security; unemployment |
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51.
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Which of the following is NOT one of the tools used by the Federal Reserve to
influence the money supply?
a. | controlling interest rates | c. | changing the required reserve
ratio | b. | selling/buying gov’t bonds | d. | printing new money to pay gov’t
bills |
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52.
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_____ advantage will decide what you should produce, while _____ advantage means
you can simply make more than someone else.
a. | Absolute; efficiency | c. | Comparative; absolute | b. | Total;
maximum | d. | Expenditure;
income |
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53.
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Which of the following would a consumer most likely support?
a. | trade barrier | c. | subsidy | b. | price floor | d. | free rider |
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54.
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Our top two trading partners today are _____.
a. | Mexico and Germany | c. | Canada and China | b. | Japan and China | d. | China and
Germany |
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55.
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Our real GDP growth rate for 2009 was approximately _____, as our economy was in
a recession.
a. | 3% | c. | $13 million | b. | 10% | d. | -2.4% |
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56.
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Who founded the study of economics?
a. | Ben Bernanke | c. | Adam Smith | b. | Alan Greenspan | d. | Dirk Creegler |
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57.
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Per capita GDP can be translated into _____.
a. | economic growth | c. | buying power | b. | average income | d. | economic
freedom |
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58.
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The US infant mortality rate is approximately _____ / 1,000 live births.
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59.
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Countries that are poor tend to have more of their economy producing in the
_____ sector.
a. | agriculture | c. | service | b. | manufacturing | d. | tertiary |
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60.
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Which number would you most want to be high for your country?
a. | birth rate | c. | infant mortality rate | b. | real GDP per
capita | d. | illiteracy
rate |
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61.
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Which type of company can sell stock?
a. | partnership | c. | business franchises | b. | corporation | d. | sole
proprietorships |
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62.
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Why does McDonald’s, or anyone else, offer coupons for their
products?
a. | to share their profits | c. | to increase surplus inventories | b. | to increase consumer
demand | d. | to give back to the
community |
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63.
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The theory of the “invisible hand” suggests that consumers
a. | only buy cheap products | c. | ultimately have no control over the
economy | b. | are afraid to spend money in a recession | d. | act in their own
self-interest |
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64.
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Which countries have shown the most rapid growth in recent years as a
percentage?
a. | only the wealthy | c. | only the poor | b. | both the wealthy and poor | d. | only the middle
countries |
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65.
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_____ studies economies as a whole, while _____ studies smaller parts like
businesses and individuals.
a. | Economics; macroeconomics | c. | Macroeconomics;
microeconomics | b. | Microeconomics; macroeconomics | d. | Macroeconomics;
economics |
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66.
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When you go to Sam’s Club and eat all the free samples, with no intention
of buying the product, you are acting as a _____, which in the real-world encourages the government
to provide public goods.
a. | mooch | c. | externality | b. | free rider | d. | sassafras |
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67.
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The demand curve slopes _____ and the supply curve slopes _____.
a. | up; down | c. | across; over | b. | down; up | d. | over; across |
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68.
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As a consumer, which of the following do you want a business to have?
a. | market power | c. | price floors | b. | excise taxes | d. | subsidies |
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69.
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Why is the Nintendo Wii still $250 to buy three years after it was released when
the PS3 has dropped in price from $600 to $300?
a. | the demand for the PS3 has decreased but for the Wii it hasn’t | c. | no one bought the
Wii | b. | the Wii is stinkii | d. | Nintendo refuses to lower their price |
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70.
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Why do prices for holiday candy always go down after the holiday?
a. | it gets cheaper to produce | c. | producers want to make more
money | b. | the gov’t orders reduction of surplus inventory | d. | consumers decrease their
demand |
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71.
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How can you make money by owning stock, WITHOUT SELLING IT?
a. | buy low & sell high | c. | dividend | b. | capitalization | d. | corporation |
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72.
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The US trades with other countries for all of the following reasons EXCEPT
which?
a. | they can make it cheaper | c. | we don’t have any factories
left | b. | we don’t have all the resources | d. | to be friends |
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73.
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Why is the government spending so much money today?
a. | they don’t care about the debt | c. | they are continuing the
war | b. | they are trying to stimulate the economy | d. | they really
aren’t |
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74.
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The government is the “sandbar in the sea of economic activity”
summarizes why the government ______.
a. | passes laws to restrict our freedoms | c. | intervenes in the
economy | b. | encourages us to innovate | d. | regulates the environment |
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75.
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How often in your life do you use economics?
a. | never again | c. | occassionally | b. | when you are an adult | d. | every day of your
life |
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